Posted by Sally Nichols on 28 Nov 2012
Getting Ready for Real Time Information (RTI)
HM Revenue & Customs (HMRC) have released information about their records recently saying that over 80 per cent of the data quality problems it encounters are the result of incorrect information supplied. Statistics and records held by HMRC, provided by UK companies, currently show that:
- 824 employees have the surname ‘Unknown’
- 572 people have the surname ‘X’, ‘Mr X’, ‘Mrs XXXXXXX’ or similar
- 507 employees are called A.N. Other
- 40 employees are over 200 hundred years old
- Over 2,000 employees have the NI number of AB123456
- A further 1,000 employees have the NI number of AA111111.
These are extreme examples but they do illustrate the importance of supplying accurate information. Everyone who is involved with paying employees through a PAYE scheme needs to start getting ready for RTI.
One of the best activities to undertake right now is to ensure that all employee information included within payroll records is accurate and complete. If you rely on employees to tell you about changes, explain to them now why it’s so important for them to keep you informed. The information that employers will need to have available to each employee for RTI filing is:
- Employee’s full name
- Date of birth
- National Insurance Number, which must be in full and correct. If an employee cannot produce a National Insurance Number, tell them to check official HMRC or Department of Work and Pensions (DWP) documentation. If they still can’t locate it, they can download Form CA6855 from our Resources Page or phone the Registration Helpline on 0845 915 7006. If your employee has never been issued with a National Insurance number, they should phone Jobcentre Plus on 0845 600 0643.
Try to verify this information using official sources such as HMRC and/or Department for Work and Pensions documentation, a passport, birth certificate or driving licence, if possible.
From April 2013, new information will have to be included in payroll records, such as hours worked. Information on temporary and casual workers and employees paid below the National Insurance lower earnings limit will also need to be filed.
Tax Innovations have been part of the RTI pilot scheme since July 2012 and the P46 New Employee Form on our website Resources Page under the Tax Innovations clients section has been updated to include all the information that will be required.
Failure to have the correct employee information could lead to your submission being rejected. HMRC will be introducing penalties for non-compliance and late or incorrect filing. The exact details of this are still to be agreed, but you can be sure that company directors will be held personally accountable for ensuring payroll processes are ‘fit for purpose’.
Other Areas to Consider
- Is your current payroll process ready for RTI? If you run your own payroll system, you’ll need to get RTI-enabled software in order to send your PAYE information to HMRC online every time a payment is made so you may need to upgrade or change your current software. If you use a payroll bureau, accountant are they ready for RTI?
- Think about how operating PAYE in real time might affect your business more widely. For instance, will you need to change procedures for starters and leavers?
- If you don’t make any salary payments in a month you will need to tell HMRC that nothing is due. Are your payments so irregular i.e quarterly/ annual salary payments only, that you will forget to do this?
If you would like any advice regarding the above article or would simply like to discuss other ways in which we could help you or your business, please contact us on 01962 856 990 or email@example.com.
- Property Partnership Incorporation and SDLT
- Overseas Pension Changes 6 April 2017
- Top 10 tax tips for expats moving to the UK
- Tax on Lump Sum Payments from Foreign Pensions
- Non-Domiciled Rebasing for Capital Tax Gains: April 2017